9 Outside Influences on the Value of a Domain NamePosted: November 21, 2011
Looking at the big picture, domains have generally been going up in value. The internet keeps growing and attracting more of people’s time and money spent. More domains get registered, crowding the domain space more, making the ones that stand out that much more important to have.
That said, when you get into certain industries, styles of name, keywords or extensions however, you don’t always get increasing values. Simply buying good domains and assuming you’ll have valuable assets that never drop in price can be dangerous.
On the other hand, sometimes certain kinds of domains get a boost and see even larger increases than the rest. It could be gradual over time, or it could simply be a single jolt that turns an otherwise decent name into something highly desirable.
What can happen to affect domain values in these ways?
1. New technologies
Technology can both sharply increase a domain’s value as well as deliver a slow or sometimes even quick decline. Tablets as a keyword was fairly average in strength 5 short years ago when the name sold for only $50,500. Then the iPad came and today Tablets.com went back on the market. Its owner has indicated receiving and declining million-dollar offers.
Floppy disks now being obsolete on the other hand have seen its best domains becoming nearly valueless. Technology can even have a hand in reducing the effectiveness of a domain extension, as the mobile browsing capability of smartphones has done with .mobi. In fact, there are fears that a new technology sometime down the road could make ALL domains obsolete!
2. The boom and bust of websites
While tech usually affects domains somewhat slowly, a sudden boom of a popular website can have a much more dramatic effect. Chat Roulette had been around for some time before suddenly spiking in popularity last year. That saw one particularly interesting flip – CamRoulette.com purchased for only $1,400 and sold at auction for $151,000 mere months later.
Be careful though – if the site then tapers off and goes back down in traffic, the similar domains go back down in value. Everyone that bought in at the peak could suffer, including that final CamRoulette.com buyer.
3. New laws
Laws pass every day in countries around the world. Sometimes these laws can heavily impact a particular industry. The gambling industry took a major hit in late 2006 when a law was passed that stopped credit cards and banks from fund online gambling. Most gambling sites left the US, losing most of their members. Values for gambling domains took an almost immediate major blow.
4. The economy
While the economy in general may have slowed domain value growth 2008-2010, it’s important to recognize factors on local economies as well. Any Detroit-related domains would have seen huge drops over the past few years vs. other cities, while Dubai domains saw a huge increase as Dubai started its huge expansion and development.
5. New words and abbreviations
What would LOL.com be worth if not for “laughing out loud”? What would Blog.com be worth if not for the meaning of blog that came about early last decade? New words and phrases take shape all the time and can create a whole new set of valuable names in the process.
6. Buzz words and phrases losing popularity
10-15 years ago, you couldn’t go anywhere online without seeing words like portal, cyber or surf. Times have changed and these words aren’t as popular online as they used to be. Domains with them may have decreased in value over the long run. Even the word internet has seen a bit of decline as shorter words like net and web are often used in its place.
7. Popular products and concepts using existing words
App and tube were existing words a decade ago. App was simply short for application and more used on piracy sites than anywhere else, and tube usually meant a physical tube like a pipe. Then Apple’s iPhone popularized phone “apps” and YouTube brought about “tube” as meaning a video site. New life breathed into those words and domains with them have shot up in value since.
8. New booming industries and failing old industries
Sometimes industries simply pop out of nowhere. Groupon’s wild success spawned hundreds of clones and created the daily deal/group buying industry, catapulting many domain values. Meanwhile, travel sites like Expedia, Travelocity and Orbitz have crushed the travel agent industry by essentially stealing their role, which have hurt travel agent domains substantially.
9. Google’s blessing or wrath
What’s one thing that can affect just about anything online? That’s right, Google. Usually their influence over keywords or industries isn’t major, but their influence over domain extensions can be. As the SEO community started to realize .org’s ability to rank almost as well as .com with similar domains, exact match .org’s have seen nice value increases.
On the other hand, Google can view an extension as overly spammy and penalize it in rankings. Some feel this has happened to .info and other cheap extensions. Google has outright banned some 2-level extensions like .co.cc due to widespread abuse. Clearly domains in penalized extensions suffer immensely in value.
Keeping up with trends and news is important to understanding values of domains. Even though domain values are generally very stable, it only takes one law, piece of news, or website to possibly swing a domain’s value wildly up or down.
At Domainate, we can help you figure out which kinds of names fit for you and fit current trends. You don’t want to end up with a name that is obsolete years down the road. Contact us if you need a domain for your business or website.